his paper describes the evolution of the economic opening and trade liberalization process implemented in Peru and the active role played by Aid for Trade. For that purpose, the paper first presents a brief historical analysis of Peruâ€™s economy from 1950 to 2006, which provides a look into the economic models applied and the effects of the economic cycles that characterized a large part of this period. As is also the case with other countries in Latin America and the Caribbean, Peru has not been able to sustain its pace of economic growth in real terms and has wasted more than thirty years as compared to other countries, such as Southeast Asian countries, which did in fact achieve highly positive results. Next, this paper goes on to describe the model change into an open economy model, starting in the early 1990s, through structural reforms that have laid the foundations for the trade liberalization process. These policies are explored with a certain degree of detail; and in hindsight, we have a better understanding of how they were implemented in stages. Emphasis is laid on the fact that the economic results of this opening are encouraging, while recognizing, however, the need to extend the benefits it presents to large social sectors that are still marginalized. A key aspect of the progress achieved in the trade liberalization process and the support it received from both the private sector and civil society has to do with the design and implementation of Peruâ€™s National Strategic Exports Plan (PENX) and its various management instruments, which carried this strategic plan to all of the countryâ€™s regions (States), creating a highly-detailed roadmap that identifies the activities that need to be implemented by the State, the private sector and civil society to foster value-added exports, particularly from the agricultural and livestock sector and SMEs. Then, the paper lays out an analysis of the role played by Aid for Trade throughout the entire process, acknowledging its valuable contribution in a set of actions carried out through its technical assistance, grants, lending and financing. The presence of the international community is also highlighted; as in the case of Peru, there have been contributions from multilateral, regional, and sub-regional financial institutions and from non-financial multilateral institutions as well, in addition to the cooperation of developed countries. There is no question that the economic results that Peru can now boast could not have been achieved without such support. This paper also draws lessons and lays out the challenges that still lie ahead for Peru to consolidate economic opening and trade liberalization and, most importantly, to reach those social sectors that are not yet enjoying the benefits of economic growth. In this regard, the paper also sets out the new challenges taken up by Aid for Trade.
Published on Sep 14, 2007
this report was prepared by the integration and trade sector (int) as a contribution to the regional meeting on mobilizing aid for trade: la...